A Long Term Equity Investor, will not worry about these macro and micro issues. The Economic Times carried out a study on the long term returns from the stock market in India from 1992 to 2022. The results were very revealing. The back testing involved an investment of Rs 1 lakh in bulk, each year, on the day Sensex was at its highest in that year. The XIRR achieved was 11.29%.
As a long term Investor cut out all the noise, don't listen to the financial news media, and just focus on your BEHAVIOUR MANAGEMENT. You need to remain invested through SIPs, during all the ups and downs of the market cycles. It'll be a VERY BORING journey. The day you start feeling EXCITED, just take a break and contemplate, where you are going wrong. Send a message in this group and we'll help you getting back to the BORING mindset.
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Remaining patient and continuing your investments uninterrupted, through all ups and downs, is the key to successful investing. In the long run, you need to maintain a realistic expectation on returns. The average returns eill be equivalent to the nominal rate of growth in GDP. That means Average GDP Growth Rate + Average Rate of Inflation. In India it works out to approx 12%.
People who try to time the markets, thereby making routine entry and exits from ghee markets; or chase the best performing funds, thereby indulging in routine switching from one fund to another, don't reach this figure.
